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By Rip Watson, Senior Reporter
This story appears in the April 8 print edition of Transport Topics.
Auto haulers, who have struggled during five years of depressed sales of cars
and light trucks, are finally enjoying some good times.
March vehicle sales reached 15.22 million on an annualized
basis, WardsAuto.com reported April 2, keeping new car and light-truck
production above 15 million for the fifth consecutive month.
“Business is good,” Robert Farrell, executive director of American Trucking
Associations’ Automobile Carriers Conference, told Transport Topics.
“Everyone is busy, and the trucks are full.”
The current sales pace was last seen in February 2008, before cratering during
the recession, hitting a low of 9 million in February 2009.
“It is a good time to be in this industry,” Kathleen McCann, CEO of car hauler
United Road Services, based in Romulus, Mich., told TT.
“The economic downturn was a painful time for many in the industry. But that
is now behind us.”
“We are enjoying the tailwinds more than the headwinds,” she said. “We are
seeing pretty robust growth; that’s good for our customers, drivers and the
company as a whole.”
McCann said the company hasn’t faced equipment or driver recruitment
challenges as the business has surged back.
“Business is a little stronger than forecast,” said Robert Griffin, president of
Kansas City, Mo.-based Jack Cooper Transport, the largest car hauler in the
At the same time, he added, “We are being very cautious. We don’t want to
have a bunch of extra rigs out there.”
The careful approach to adding assets is needed to control costs and avoid
overcapacity that has plagued the industry in the past, industry officials said.
McCann agreed it was important to remain disciplined and not commit more
resources than needed.
Steve Tripp, head of worldwide vehicle transportation for vehicle maker
Chrysler, told TT that trucking service has been solid, with adequate capacity
almost everywhere at all times.
“They have learned a lesson from past bubbles,” he said. “Carriers seem to be
adding equipment and hiring drivers at a reasonable pace. They are buying
enough equipment to keep up with the market.”
He also said Chrysler chose to switch some new vehicle shipments to truck
from rail because of railcar supply difficulties last month.
“Certainly, March was challenging for Chrysler and all the auto
manufacturers,” he said. “We had a lot of railcar shortages.”
“In April, so far it has been markedly better,” Tripp added, saying that freight
cars often are hard to find in March because of weather and production surges.
“We have some optimism that March may have been a seasonal blip that won’t
continue for the rest of the year,” he said.
Until the upturn that began gradually in 2010 and picked up steam last year, car
haulers’ fortunes slid along with the industry.
“With the economic meltdown in 2008 and 2009, carriers exited the market due
to being overleveraged,” ATA’s Farrell said. “The overwhelming majority of
their fleets were sold for scrap.”
One milestone was the 2008 shutdown of Performance Transportation Services,
then the second-largest car hauler, following a Teamsters strike.
Allied Systems Holdings, which once was the largest auto hauler, survived a
long-running labor problem and a bankruptcy before a dispute with automakers
in 2011 led to lost business that was picked up by Jack Cooper Transport. The
following year, Allied’s debt-holders filed an involuntary bankruptcy petition
against the Atlanta-based company.
The company didn’t return calls seeking comment on its current business
It’s also a good time for fleets supplying the automotive sector, said Shepard
Dunn, president of Bestway Express, Vincennes, Ind.
“Pent-up demand appears to be driving the high auto sales,” he told TT,
predicting a surge in demand for trucking until the auto plants’ summer
shutdown. “That’s good, America needs it. The good news is that tells me we
might be getting closer to the normal freight volumes we are used to.”